Scenario IV

Trust Fund Investments

IV - 1 June 2001

Federal trust funds are managed by either a Federal program agency or by Fiscal Service on behalf of an 

agency. The managing entities make the investment decisions. The Secretary of the Treasury 

administers the investment programs for Federal accounts authorized by law to invest in U.S. 

Government interest-bearing obligations. Treasury’s role is twofold: 1) to act as executor of investment 

decisions directed by Federal program agencies (for agency-managed trust funds) and 2) to maintain the 

role of managing trustee (for Treasury-managed trust funds), wherein Treasury makes and executes 

investment decisions for certain funds. Fiscal Service administers these two mission-critical functions. 

Scenario IV applies to both agency-managed and Treasury-managed trust funds. The entity that 

manages the fund, which would be either the agency or Fiscal Service acting on behalf of the agency, 

records the transactions outlined herein.

Federal trust fund receipts can be invested in various types of securities, but appropriate authorization is 

required. Trust fund investments are primarily in public debt securities, issued by Fiscal Service, with 

maturities suitable to meet the needs of the fund. Investments in public debt securities are treated as an 

exchange of an asset. Scenario IV addresses these types of investments. A small number of trust funds 

are authorized to invest in non-Federal securities (securities held outside of the Government). 

Investments in non-Federal securities are treated as a purchase of an asset, rather than as an exchange of 

an asset. An obligation and an outlay must be recorded for the purchase. Investments in non-Federal 

securities are less common, and therefore are not covered in this scenario. Even fewer trust funds are 

authorized to invest in agency securities, whereby one agency purchases securities issued by another 

agency. This type of investment, which is also uncommon in the Federal Government, requires specific 

authorization and is not covered in this scenario. Refer to OMB Circular A-34 for additional reporting 

guidance, and to the USSGL Web site for guidance on accounting for agency securities.

For trust funds managed by Federal program agencies (e.g., Civil Service Retirement and Disability 

Trust Fund), program agencies are responsible for determining the amounts to be invested and the terms 

of the investments. Agencies also are responsible for calling Fiscal Service with specific 

investment/redemption orders and reporting investment activity via the SF 224: Statement of 

Transactions, (SF 133, USSGL 2108, P&F), and on the agency financial statements.

For trust funds managed by Fiscal Service (e.g., Federal Old-Age and Survivors Insurance Trust Fund, 

Unemployment Trust Fund), Fiscal Service is responsible for administering and monitoring the daily 

activities of the managed trust funds for receipts, investments, redemptions, and interest calculations. 

Unlike agency-managed trust funds, Fiscal Service reports the investment activity via the SF 224 for the 

trust funds it manages. Fiscal Service also reports the appropriate investment figures through FACTS II 

and provides the same information to the agency responsible for FACTS I reporting and the agency 

financial statements.

This scenario is specific to trust funds, and illustrates basic investment transactions. For additional 

transactions and reporting requirements, refer to OMB Circulars A-34 and A-11; TFM Volume I 

Part 2 - Chapter 4300: Intragovernmental Fiduciary Transactions Accounting Guide; TFM Volume I Part 

2 - Chapter 4300, T/L 587: Reporting Instructions for Accounts Invested in Department of the Treasury 

Securities; and additional individualized scenarios developed by the USSGL staff (located on the 

USSGL Web site).
Scenario IV

Trust Fund Investments

IV - 2 June 2001

Scenario Assumptions

The following assumptions apply to Scenario IV:

• Receipts of this trust fund consist of predominantly non-exchange revenue. Therefore, the interest 

earned on investments is classified as non-exchange. For guidance on interest classified as 

exchange, refer to SFFAS #7, Accounting for Revenue and Other Financing Sources, paragraphs 

306-308.

• The programs of the investing entity are not subject to apportionment. Refer to Section III, 

Accounting Transactions, of TFM S2-01-02 (as updated) for comprehensive transactions that 

include accounting for programs that are subject to apportionment.
Scenario IV

Trust Fund Investments

IV - 3 June 2001

1. To record the collection of tax receipts that are deposited into a trust fund 

receipt account. The receipts are automatically credited to the corresponding expenditure 

account, whereby they can be invested.1 (TC A186)

Budgetary

4114 Appropriated Trust or Special Fund Receipts 1,000,000

4620 Unobligated Funds Not Subject to Apportionment 1,000,000

Proprietary

1010 Fund Balance With Treasury 1,000,000

5800 Tax Revenue Collected 1,000,000

2. To record the immediate investment of the receipts in U.S. Treasury Security A issued by 

the Bureau of the Fiscal Service. The security has a par value of $1,000,000 and was 

purchased at a discount of $200,000. (TC B128)

Budgetary

None

Proprietary

1610 Investments in U.S. Treasury Securities Issued

by Fiscal Service 1,000,000

1611 Discount on U.S. Treasury Securities Issued

by Fiscal Service 200,000

1010 Fund Balance With Treasury 800,000

 

1 The transactions in this scenario combine the activity of the receipt and expenditure accounts into one. The receiptexpenditure account relationship is described in more detail in the Introduction of the Guide.
Scenario IV

Trust Fund Investments

IV - 4 June 2001

3. To record the collection of additional receipts that are deposited into the trust fund receipt 

account. The receipts are automatically credited to the corresponding expenditure 

account, whereby they can be invested. (TC A186)

Budgetary

4114 Appropriated Trust or Special Fund Receipts 5,000,000

4620 Unobligated Funds Not Subject to Apportionment 5,000,000

Proprietary

1010 Fund Balance With Treasury 5,000,000

5800 Tax Revenue Collected 5,000,000

4. To record the immediate investment of the receipts in U.S. Treasury Security B issued by 

the Bureau of the Fiscal Service. The security has a par value of $5,000,000 and was 

purchased for a premium of $10,000. (TC B126)

Budgetary

4620 Unobligated Funds Not Subject to Apportionment 10,000

4114 Appropriated Trust or Special Fund Receipts 10,000

Proprietary

1610 Investments in U.S. Treasury Securities Issued

by Fiscal Service 5,000,000

1612 Premium on U.S. Treasury Securities Issued

by Fiscal Service 10,000

1010 Fund Balance With Treasury 5,010,000

5. To record accrued interest receivable for Securities A and B. Budgetary resources are not 

recorded until interest is collected. (TC C215)

Budgetary

None

Proprietary

1340 Interest Receivable 101,000

5310 Interest Revenue 101,000
Scenario IV

Trust Fund Investments

IV - 5 June 2001

6. To record the maturity of Security A.

A. To record the amortization of the discount. (TC D510)

Budgetary

None

Proprietary

1613 Amortization of Discount and Premium on U.S. Treasury

Securities Issued by Fiscal Service 200,000

5310 Interest Revenue 200,000

B. To record the redemption. (TC C124)

Budgetary

4114 Appropriated Trust or Special Fund Receipts 200,000

4620 Unobligated Funds Not Subject to Apportionment 200,000

Proprietary

1010 Fund Balance With Treasury 1,000,000

1610 Investments in U.S. Treasury Securities Issued

by Fiscal Service 1,000,000

1611 Discount on U.S. Treasury Securities Issued

by Fiscal Service 200,000

1613 Amortization of Discount and Premium on U.S. Treasury

Securities Issued by Fiscal Service 200,000

7. To record the obligation and disbursement of funds to non-Federal recipients. Investments 

redeemed in the previous transaction are enough to cover disbursement needs. (TC B107)

Budgetary

4620 Unobligated Funds Not Subject to Apportionment 12,000

4902 Delivered Orders - Obligations, Paid 12,000

Proprietary

6100 Operating Expenses/Program Costs 12,000

1010 Fund Balance With Treasury 12,000
Scenario IV

Trust Fund Investments

IV - 6 June 2001

8. To record the maturity of Security B.

A. To record the collection of interest deposited into the trust fund receipt account. (TC 

A196)

Budgetary

4114 Appropriated Trust or Special Fund Receipts 100,000

4620 Unobligated Funds Not Subject to Apportionment 100,000

Proprietary

1010 Fund Balance With Treasury 100,000

1340 Interest Receivable 100,000

B. To record the amortization of the premium. (TC D510)

Budgetary

None

Proprietary

5310 Interest Revenue 10,000

1613 Amortization of Discount and Premium on U.S. Treasury

Securities Issued by Fiscal Service 10,000

C. To record the redemption. Budgetary resources were previously reduced for premium 

at the time of purchase. (TC C122)

Budgetary

None

Proprietary

1010 Fund Balance With Treasury 5,000,000

1610 Investments in U.S. Treasury Securities Issued

by Fiscal Service 5,000,000

1613 Amortization of Discount and Premium on U.S. Treasury

Securities Issued by Fiscal Service 10,000

1612 Premium on U.S. Treasury Securities Issued

by Fiscal Service 10,000
Scenario IV

Trust Fund Investments

IV - 7 June 2001

9. To record the collection of additional receipts that are deposited into the trust fund receipt 

account. The receipts are automatically credited to the corresponding expenditure 

account, whereby they can be invested. (TC A186)

Budgetary

4114 Appropriated Trust or Special Fund Receipts 500,000

4620 Unobligated Funds Not Subject to Apportionment 500,000

Proprietary

1010 Fund Balance With Treasury 500,000

5800 Tax Revenue Collected 500,000

10. To record the immediate investment of the receipts in U.S. Treasury Security C issued by 

the Bureau of the Fiscal Service. The security has a par value of $500,000 and was 

purchased at a discount of $40,000. (TC B128)

Budgetary

None

Proprietary

1610 Investments in U.S. Treasury Securities Issued

by Fiscal Service 500,000

1611 Discount on U.S. Treasury Securities Issued

by Fiscal Service 40,000

1010 Fund Balance With Treasury 460,000

11. To record the amortization of the discount for Security C. (TC D510)

Budgetary

None

Proprietary

1613 Amortization of Discount and Premium on U.S. Treasury

Securities Issued by Fiscal Service 10,000

5310 Interest Revenue 10,000
Scenario IV

Trust Fund Investments

IV - 8 June 2001

Note: For those trust funds with receipts that are limited to the year=s obligations, an adjusting entry 

is required. Follow the guidance in Scenario II: Trust Fund Balances Precluded from Obligation for 

treatment of unobligated balances. 

Budgetary Pre-Closing Adjusted Trial Balance (FACTS II ATB):

4114 6,790,000

4620 6,778,000

4902 12,000

6,790,000 6,790,000

Budgetary Closing Entries:

C1. To record the consolidation of actual net-funded resources. (TC F204)

4201 Total Actual Resources - Collected 6,790,000

4114 Appropriated Trust or Special Fund Receipts 6,790,000

C2. To record the closing of Expended Authority - Paid. (TC F214)

4902 Delivered Orders - Obligations, Paid 12,000

4201 Total Actual Resources - Collected 12,000

Budgetary Post-Closing Trial Balance:

4201 6,778,000

4620 6,778,000

6,778,000 6,778,000
Scenario IV

Trust Fund Investments

IV - 9 June 2001

Proprietary Pre-Closing Trial Balance (FACTS I Trial Balance):

1010 6,318,000

1340 1,000

1610 500,000

1611 40,000

1613 10,000

5310 301,000

5800 6,500,000

6100 12,000

6,841,000 6,841,000

Proprietary Closing Entries:

C1. To record the closing of revenues and expenses to cumulative results of operations. (TC 

F228)

5310 Interest Revenue 301,000

5800 Tax Revenue Collected 6,500,000

3310 Cumulative Results of Operations 6,789,000

6100 Operating Expenses/Program Costs 12,000

Proprietary Post-Closing Trial Balance:

1010 6,318,000

1340 1,000

1610 500,000

1611 40,000

1613 10,000

3310 6,789,000

6,829,000 6,829,000
Scenario IV

Trust Fund Investments

IV - 10 June 2001

SF 133: Report on Budget Execution and Budgetary Resources (Quarter 4):

1A Appropriations (4114E) 6,790,000

2A Unobligated Balance Brought Forward

3 Spending Authority from Offsetting Collections 

5 Temporarily Not Available Pursuant to Public Law 

7 Total Budgetary Resources 6,790,000

8A1 Obligations Incurred, Direct

8A3 Obligations Incurred, Direct, Not Subject to Apportionment (4902E) 12,000

9 Unobligated Balances Available (4620E) 6,778,000

11 Total Status of Budgetary Resources 6,790,000

12. Obligated Balance, Net as of October 1

13. Obligated Balance Transferred, Net

14. Obligated Balance, Net, End of Period

15A. Disbursements (4902E) 12,000

USSGL 2108: Year-end Closing Statement:

Column 5 Post-Closing Unexpended Balance (1010E) 6,318,000

Column 6 Other Authorizations (1610E, 1611E) 460,000

Column 11 Unobligated Balance (4620E) 6,778,000
Scenario IV

Trust Fund Investments

IV - 11 June 2001

Program and Financing Schedule (P&F):

Obligations by Program Activity

1000 Total new obligations (4902E) 12,000

Budgetary Resources Available for Obligation

2140 Unobligated balance available, start of year 0

2200 New budget authority(gross) (sum 4000 to 6990) 6,790,000

2395 Total new obligations (-) (from line 1000) (12,000)

2499 Unobligated balance carried forward, end of year (4620E) 6,778,000

New Budgetary Authority (Gross), Detail

4026 Appropriation (trust fund, definite) (4114E) 6,790,000

7000 Total new budget authority (gross) (4114E) 6,790,000

Memorandum Entries

9201 Total investments, start of year (par) (1610B) 0

9202 Total investments, end of year (par) (1610E) 500,000
Scenario IV

Trust Fund Investments

IV - 12 June 2001

OMB Form and Content Statements

Balance Sheet

ASSETS

1A1 Fund Balance With Treasury (1010E) 6,318,000

1A4 Investments (1340E, 1610E, 1611E, 1613E) 471,000

LIABILITIES and NET POSITION

6B Cumulative Results of Operations (3310E) 6,789,000

Statement of Net Cost

1 Program Costs - Public - Production (6100E) 12,000

1D Less Earned Revenue 02

4 Net Cost of Operations (calculation) 12,000

Statement of Changes in Net Position

1 Net Cost of Operations 12,000

2B Taxes (and other nonexchange revenue) (5310E, 5800E) 6,801,000

9 Net Position - End of Period (calculation 2-1) 6,789,000

 

2 For most trust funds, invested balances are derived predominantly from earmarked taxes and other non-exchange revenue. 

Accordingly, the interest earned is classified as non-exchange, thus not deducted from the gross cost of operations. For those 

trust funds, however, where the main source of balances consist of exchange revenue (e.g. Civil Service Retirement and 

Disability fund), the interest shall be classified as exchange, and thus deducted from the gross cost of operations. (See SFFAS 

#7, &306-308).
Scenario IV

Trust Fund Investments

IV - 13 June 2001

OMB Form and Content Statements (continued)

Statement of Budgetary Resources

1A Budget Authority - Appropriations (4114E) 6,790,000

5 Total Budgetary Resources 6,790,000

6 Obligations Incurred (4902E) 12,000

7B Unobligated - Exempt from Apportionment (4620E) 6,778,000

9 Total Status of Budgetary Resources 6,790,000

10. Obligations Incurred (4902E) 12,000

Statement of Financing

1 Obligations and Nonbudgetary Resources (4902E) 12,000

2 Resources That Do Not Fund Net Cost of Operations 0

3 Components of Costs of Operations That Do Not Require

or Generate Resources 0

4 Financing Sources Yet to be Provided 0

5 Net Cost of Operations 12,000